All amounts in Canadian dollars unless specified.
CALGARY, October 31, 2025 /CNW/ – MEG Energy Corp. (TSX: MEG) (“MEG”, or the “Company”) is providing additional disclosure regarding the previously announced asset transaction between Strathcona Resources Ltd. (TSX: SCR) (“Strathcona”) and Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) (“Cenovus”), as initially disclosed in its press release of October 27, 2025.
As previously announced, MEG entered into a second amending agreement (the “Second Amending Agreement”) with Cenovus to amend the arrangement agreement between MEG and Cenovus dated August 21, 2025, as amended on October 7, 2025 (the “First Amending Agreement”), to increase the consideration payable to holders (“MEG Shareholders”) of common shares of MEG (“MEG Shares”) to $30.00 per MEG Share (the “Improved Consideration”), based on Cenovus’s closing share price on October 24, 2025. Concurrent with the execution of the Second Amending Agreement, Cenovus entered into an agreement with Strathcona (the “SCR Support Agreement”) pursuant to which Strathcona, holding 36.1 million MEG Shares representing 14.2% of the outstanding MEG Shares, agreed to vote all of such MEG Shares for the acquisition of MEG by Cenovus (the “Cenovus Transaction”). Concurrent with and as a condition of entering into the SCR Support Agreement, Cenovus entered into an agreement (the “Divestiture Agreement”) with Strathcona to sell certain assets, including the Vawn thermal heavy oil asset in Saskatchewan and certain undeveloped lands in western Saskatchewan and Alberta (collectively, the “Divested Assets”), for aggregate consideration of $150 million (the “CVE Divestiture”).
This press release provides additional information regarding the SCR Support Agreement, the CVE Divestiture and MEG’s consideration of it as part of its evaluation of the Improved Consideration.
MEG Special Committee and Board Process
During the morning of Sunday, October 26, 2025, the President and Chief Executive Officer of MEG was presented with the terms of the proposed Second Amending Agreement and concurrently informed by Cenovus of an agreement in principle between Cenovus and Strathcona in respect of the commercial terms of the SCR Support Agreement and the Divestiture Agreement. A meeting of the special committee (“Special Committee”) of the MEG board of directors (the “MEG Board”) and a meeting of the MEG Board were called for the evening of Sunday, October 26, 2025 to consider the proposed increase in the purchase price from Cenovus and related agreements between Cenovus and Strathcona.
The primary consideration before the Special Committee on the evening of Sunday, October 26, 2025 was whether or not to approve the Second Amending Agreement to reflect the increased purchase price offered by Cenovus of $0.50 per MEG Share. In considering the Second Amending Agreement, the Special Committee was advised that the Improved Consideration was contingent on Cenovus and Strathcona entering into the SCR Support Agreement and the Divestiture Agreement.
In determining whether to recommend approval of the Second Amending Agreement to the MEG Board, the Special Committee considered the advice of its financial and legal advisors and available information about the Divested Assets, including their location relative to Strathcona’s existing assets, available production history, and the relative size of the assets, which produced an average of approximately 5,000 barrels of oil equivalent per day (boe/d) to date in 2025, in the context of the size of Cenovus, where Cenovus generated production of approximately 832,000 boe/d in the third quarter of 2025 and had a market capitalization in excess of $40 billion as of October 24, 2025.
Pursuant to the terms of the Divestiture Agreement, the Divested Assets are being sold to Strathcona for aggregate consideration of $150 million, comprised of $75 million in cash paid on closing and up to $75 million in contingent consideration dependent on future commodity prices.
As MEG was not a party to either of the SCR Support Agreement and the Divestiture Agreement and was not involved in any negotiations related to those agreements, the information that it had was necessarily limited to the foregoing material terms. While MEG received copies of the SCR Support Agreement and the Divestiture Agreement, they were presented to MEG in near final form and MEG did not comment on the agreements.
BMO Capital Markets and RBC Capital Markets, the financial advisors to the MEG Board and the Special Committee, respectively, provided financial advice to the Special Committee in respect of the materiality of the Divested Assets to Cenovus and the impact of the CVE Divestiture on the consideration to be received by MEG Shareholders at closing of the Cenovus Transaction. Based on the information available to it, each financial advisor advised the MEG Board and Special Committee that the Divested Assets were immaterial to Cenovus (and by implication to a combined Cenovus and MEG) and that the CVE Divestiture would not materially impact the consideration to be received by MEG Shareholders under the Cenovus Transaction.
After considering advice from its external financial and legal advisors, the Special Committee determined to recommend that the MEG Board approve the entering into of the Second Amending Agreement. The MEG Board, informed in part by the recommendation of the Special Committee and after considering advice from the external financial and legal advisors, determined that the entering into of the Second Amending Agreement was in the best interests of MEG, and unanimously approved the Second Amending Agreement and the transactions contemplated thereby.
In considering the approval of the Second Amending Agreement, although MEG is of the view that the Cenovus Transaction is not subject to the requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, the MEG Board has as matter of fairness, determined that the Cenovus Transaction should be considered a “business combination” for purposes of MI 61-101 and thereby subject to a Minority Approval Vote (as defined below) in addition to the approval of the Cenovus Transaction by at least 66⅔% of the MEG Shareholders represented in person or by proxy at the special meeting of the MEG Shareholders to approve the Cenovus Transaction (the “Meeting”).
MI 61-101 requires that, in addition to any other required security holder approval, a business combination must be subject to “minority approval” (as defined in MI 61-101), which is a simple majority of the votes cast thereon by MEG Shareholders present in person or represented by proxy at the Meeting, after excluding the votes cast by those persons whose votes are required to be excluded in accordance with MI 61-101 (the “Minority Approval Vote”). Pursuant to MI 61-101, MEG Shares held by a MEG Shareholder who is a “related party” may in certain circumstances, including where such party receives a collateral benefit, be excluded from voting in the Minority Approval Vote. Strathcona is a “related party” of MEG pursuant to MI 61-101 by virtue of its ownership of greater than 10% of the issued and outstanding MEG Shares. As a result, the 36.1 million MEG Shares held, directly or indirectly by Strathcona, and its respective related parties or joint actors, will be excluded for the purpose of tabulating the Minority Approval Vote.
Divested Assets
Following the announcement of the Second Amending Agreement, the SCR Support Agreement and the CVE Divestiture, MEG has, with the cooperation of Cenovus, conducted a further review of the Divested Assets. Based upon information provided by Cenovus on October 30, 2025, the Vawn thermal heavy oil asset in Saskatchewan and the 46 sections of undeveloped lands in Western Saskatchewan and Alberta forming part of the Divested Assets had total proved reserves of 25.2 million barrels as at year-end 2024. MEG was informed that Cenovus agreed to a contingent payment because production from the Divested Assets had been inconsistent through the past year. The contingent consideration was set at $1.0 million for each dollar per barrel the Western Canada Select (WCS) index averages above C$70 per barrel in a given quarter, payable quarterly over the 14 quarters following closing, up to a maximum of $75 million. The subsequent information provided reaffirmed the Special Committee and the MEG Board’s previous understanding of the Divested Assets and did not alter the Special Committee and the MEG Board’s previous view that the CVE Divestiture is immaterial to Cenovus and would not have a material impact on the consideration to be received by MEG Shareholders pursuant to the Cenovus Transaction.
Information Circular
MEG filed an information circular (“Circular”) on September 12, 2025, as updated by MEG’s press releases dated October 10, 2025, October 27, 2025 and October 30, 2025 in accordance with the interim order of the Court of King’s Bench of Alberta (the “Court”) dated September 9, 2025 (the “Interim Order”), which provides further details on the Cenovus Transaction, election process and the Meeting. In accordance with the terms of the Interim Order, this news release updates the information presented in the Circular, as amended.
Copies of the Circular, the Letter of Transmittal and Election Form, the First Amending Agreement, the Second Amending Agreement and additional information on the Meeting can be found at: https://www.megenergy.com/investors/shareholder-information/special-meeting-of-meg-shareholders/.
Advisors
BMO Capital Markets and Burnet, Duckworth & Palmer LLP are acting as financial advisor and legal counsel, respectively, to the Company. RBC Capital Markets and Norton Rose Fulbright Canada LLP are acting as financial advisor and legal counsel, respectively, to the Special Committee.
Forward-Looking Information
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). Words such as “expect”, “continue”, “may”, “will”, “maintain”, “obtain”, “after”, “promptly” and similar expressions suggesting future events or future performance are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward-looking statements and information relating to: the expectation that the MEG Shares held by Strathcona, directly and indirectly, will be excluded for the purpose of tabulating the Minority Approval Vote and other similar statements.
Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent known and unknown risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of assumptions, risks and uncertainties including, without limitation: completion of the Cenovus Transaction on the anticipated terms and timing, or at all, including obtaining the requisite Court and MEG Shareholder approvals and the satisfaction of the conditions to closing the Cenovus Transaction; the contingent consideration payable in connection with the CVE Divestiture, including the amount and timing thereof; the effect or outcome of litigation and/or regulatory challenges that may arise in relation to the Cenovus Transaction or otherwise; the existence of any laws or material changes thereto that may adversely affect Cenovus or MEG or impact the completion of the Cenovus Transaction; potential adverse changes to business prospects and opportunities resulting from the announcement or completion of the Cenovus Transaction; and general business, market and economic conditions.
These forward-looking statements and information are based on certain key expectations and assumptions made by MEG. Completion of the Cenovus Transaction is subject to a number of conditions which are typical for transactions of this nature. Assumptions have been made with respect to the satisfaction of all conditions precedent in respect of the Cenovus Transaction. Although MEG believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward- looking statements and information as MEG cannot give any assurance that they will prove to be correct. Accordingly, readers are cautioned that the actual results achieved may vary from the forward-looking information provided herein and that the variations may be material. Readers are also cautioned that the foregoing list of assumptions, risks and factors is not exhaustive.
Further information regarding the assumptions and risks inherent in the making of forward-looking statements and in respect of the Cenovus Transaction can be found in MEG’s other public disclosure documents which are available through the Company’s website at http://www.megenergy.com/investors and through the SEDAR+ website at http://www.sedarplus.ca. The forward-looking information included in this news release is expressly qualified in its entirety by the foregoing cautionary statements. Unless otherwise stated, the forward-looking information included in this news release is made as of the date of this news release and MEG assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by law.
Oil and Gas Advisories
The estimates of reserves for the Divested Assets may not reflect the same confidence level as estimates of reserves for all properties, due to effects of aggregation. Based on the information provided in Cenovus’s annual information form for the year ended December 31, 2024 dated February 19, 2025 (the “Cenovus AIF”), as at December 31, 2024, Cenovus’s total proved reserves in Canada were 5,587 MMboe.
Based on the information provided in the Cenovus AIF, Cenovus’s proved reserves are evaluated each year by independent qualified reserves evaluators. The reserves estimates provided herein are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater than, or less than, the estimates disclosed. Please see the Cenovus AIF (available on SEDAR+ at sedarplus.ca and Cenovus’s website at cenovus.com), including the risk factors and advisories set out therein, for additional information in respect of Cenovus’s reserves estimates.
Barrel of Oil Equivalent
“Boe” means barrel of oil equivalent. In this presentation, certain gas volumes have been converted to boe at the ratio of six thousand cubic feet (“Mcf”) of natural gas to one barrel (“bbl”) of crude oil. The usage of boe may be misleading, particularly if used in isolation. A boe conversion ratio of six Mcf to one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the wellhead. Given that the value ratio based on the current price of natural gas as compared to crude oil is significantly different from the energy equivalency conversion ratio of six to one, utilizing a boe conversion ratio of six Mcf to one bbl may be misleading as an indication of value.
Abbreviations
boe | barrels of oil equivalent |
MMboe | Million barrels of oil equivalent |
Information Regarding Cenovus
This press release includes certain information relating to Cenovus. Unless otherwise indicated, such information was derived from the Cenovus AIF and other publicly available documents of Cenovus, as well as certain other third-party sources. Information regarding Cenovus’s production was provided by Cenovus.
Although MEG has no knowledge that would indicate that any information provided by Cenovus or in any documents filed by Cenovus is untrue or incomplete, MEG does not assume any responsibility for the accuracy or completeness of the information contained in such documents, or for any failure by Cenovus to disclose events that may have occurred or that may affect the significance or accuracy of any such information, which are unknown to MEG.
For further information:
Shareholder Questions:
MEG Investor Relations, 403.767.0515, [email protected]
Sodali & Co., 1.888.999.2785 or 1.289.695.3075 for banks, brokers, and callers outside North America, [email protected]
Media Questions:
MEG Media Relations, 403.775.1131, [email protected]
All amounts in Canadian dollars unless specified.
CALGARY, AB, Oct. 27, 2025 /CNW/ – MEG Energy Corp. (TSX: MEG) (“MEG” or the “Company”) today announced that it has entered into a second amending agreement (the “Second Amending Agreement”) with Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) (“Cenovus”) to amend the arrangement agreement between MEG and Cenovus dated August 21, 2025 (the “Arrangement Agreement”) as amended on October 7, 2025 (“First Amending Agreement”). The Second Amending Agreement increases the consideration payable to holders (“MEG Shareholders”) of common shares of MEG (“MEG Shares”) to $30.00 per MEG Share (the “Improved Transaction Consideration”) based on Cenovus’s closing share price on October 24, 2025.
The Improved Transaction Consideration represents a 47% premium to MEG’s unaffected 20-day volume-weighted share price as of May 15, 2025, the last trading day preceding the first public announcement by Strathcona Resources Ltd. (“Strathcona”) that it intended to acquire MEG, and an increase of $0.43 per MEG Share from the market value as of October 24, 2025, of the consideration (the “Prior Transaction Consideration”) offered by Cenovus under the First Amending Agreement.
In addition, MEG understands that, concurrently with the execution of the Second Amending Agreement, Cenovus has entered into an agreement with Strathcona (the “SCR Support Agreement”) pursuant to which Strathcona, holding 36.1 million MEG Shares representing 14.2% of the outstanding MEG Shares, has agreed to vote, subject to the terms of the SCR Support Agreement, all of such MEG Shares FOR the Improved Cenovus Transaction (as defined herein). With Strathcona’s support, MEG currently expects that approximately 79% of the MEG Shares represented by proxy or expected to be voted in person at the Meeting are FOR the approval of the Improved Cenovus Transaction.
MEG also understands that, concurrent with the entering into the SCR Support Agreement, Cenovus entered into an agreement with Strathcona to sell certain assets, including the Vawn thermal heavy oil asset in Saskatchewan and certain undeveloped lands in western Saskatchewan and Alberta (“Divested Assets”), for aggregate consideration of $150 million, comprised of $75 million cash paid on closing and up to $75 million in contingent consideration dependent on future commodity prices (the “Cenovus Divestment Transaction”). The Divested Assets subject to the Cenovus Divestment Transaction have existing production of approximately 5,000 barrels of oil equivalent per day based on average production to date in 2025. The SCR Support Agreement and the Cenovus Divestment Transaction were each an arm’s length transaction negotiated directly between Cenovus and Strathcona without the involvement of MEG, and MEG understands that neither the Divested Assets nor the consideration payable in connection with the sale therewith are considered to be material to Cenovus.
Under the revised transaction with Cenovus, pursuant to the terms of the Second Amending Agreement (the “Improved Cenovus Transaction”), each MEG Shareholder will have the option to elect to receive:
i. $30.00 in cash per MEG Share (“Cash Consideration”);
ii. 1.255 Cenovus common shares (each whole share, a “Cenovus Share”) per MEG Share (“Share Consideration”); or
iii. a combination thereof,
in all cases, subject to rounding and proration based on maximum aggregate Cash Consideration of approximately $3.8 billion and maximum aggregate Share Consideration of approximately 159.6 million Cenovus Shares, as set out in the Arrangement Agreement, as amended by the First Amending Agreement and the Second Amending Agreement.
The value of the Improved Transaction Consideration represents a mix of 50% cash and 50% Cenovus Shares. On a fully prorated basis, consideration per MEG Share represents approximately $15.00 in cash and 0.6275 of a Cenovus Share. The consideration to be received by MEG Shareholders values MEG at $30.00 per MEG Share on a fully prorated basis based on Cenovus’s closing share price on October 24, 2025, representing an enterprise value of approximately $8.6 billion, including assumed debt.
The Second Amending Agreement will be filed today, October 27, 2025, on MEG’s SEDAR+ profile at www.sedarplus.ca.
The MEG Board Unanimously Recommends MEG Shareholders Vote FOR the Improved Cenovus Transaction
The Board of Directors of MEG (the “MEG Board”), informed in part by the recommendation of a special committee of independent directors (the “Special Committee”) and after considering advice from its external financial and legal advisors, unanimously determined that the Improved Cenovus Transaction is in the best interests of MEG, and approved the Second Amending Agreement and the transactions contemplated thereby. The MEG Board recommends MEG Shareholders vote FOR the Improved Cenovus Transaction at the Meeting.
The Improved Cenovus Transaction is subject to a number of conditions, including: (i) approval by at least 66⅔% of the MEG Shareholders represented in person or by proxy at the Meeting and the Minority Approval Vote (as defined below); (ii) approval of the Court of King’s Bench of Alberta; and (iii) other customary closing conditions. The Competition Act Approval and the HSR Approval (each as defined in the Arrangement Agreement), were obtained on September 25, 2025 and September 16, 2025, respectively, and remain in effect for the Improved Cenovus Transaction.
Minority Approval Vote
Although the Arrangement is not subject to the requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), the MEG Board, in approving the Second Amending Agreement, has as a matter of fairness determined that the Arrangement should be considered a “business combination” for purposes of MI 61-101 and thereby subject to a Minority Approval Vote (as defined below) in addition to the approval of the Arrangement by at least 66⅔% of the MEG Shareholders represented in person or by proxy at the Meeting.
MI 61-101 requires that, in addition to any other required security holder approval, a business combination must be subject to “minority approval” (as defined in MI 61-101), which is a simple majority of the votes cast thereon by MEG Shareholders present in person or represented by proxy at the Meeting, after excluding the votes cast by those persons whose votes are required to be excluded in accordance with MI 61-101 (the “Minority Approval Vote”). Pursuant to MI 61-101, MEG Shares held by a Shareholder who is a “related party” may in certain circumstances be excluded from voting in the Minority Approval Vote. Strathcona is a “related party” of MEG pursuant to MI 61-101 by virtue of its ownership of greater than 10% of the issued and outstanding MEG Shares. As a result, the MEG Shares held, directly or indirectly by Strathcona, and its respective related parties or joint actors, will be excluded for the purpose of tabulating the Minority Approval Vote.
As of the date hereof, to the knowledge of MEG, Strathcona and its related parties or joint actors beneficially own or exercise control or direction over, directly or indirectly, an aggregate of 36,100,000 MEG Shares, representing in the aggregate approximately 14.2% of the outstanding MEG Shares.
Based on the foregoing, MEG currently expects that approximately 75% of the MEG Shares represented by proxy or expected to be voted in person at the Meeting are FOR the approval of the Improved Cenovus Transaction when excluding the MEG Shares controlled by Strathcona for the purposes of the Minority Approval Vote.
Vote FOR the Improved Cenovus Transaction Today – Wednesday, October 29, 2025 Proxy Deadline Approaching
The special meeting of MEG Shareholders (the “Meeting”) is scheduled for Thursday, October 30, 2025 at 9:00 a.m. (Calgary Time) and will take place at Brookfield Place, 225 – 6th Avenue S.W., Suite 1400, Calgary, Alberta or through a live audio webcast accessible at https://meetings.lumiconnect.com/400-560-917-636. The password for the live audio webcast of the Meeting is “meg2025”, case-sensitive.
The MEG Board urges you to deposit your proxy form or voting instruction form and vote FOR the Improved Cenovus Transaction ahead of the proxy deadline of Wednesday, October 29, 2025 at 9:00 a.m. (Calgary Time) (the “Proxy Deadline”).
Due to time sensitivity and the Canada Post strike, MEG Shareholders are strongly encouraged to only vote online or by telephone using the instructions below:
Registered MEG Shareholders | Beneficial MEG Shareholders | |
|---|---|---|
Who? | If your MEG Shares are held in your name and represented by a physical certificate or direct registration system advice (“DRS Advice”) | If your MEG Shares are held with a broker, bank or other intermediary |
Telephone | Call 1.866.732.VOTE (8683) (toll-free in North America) or 1.312.588.4290 (outside North America) using the 15-digit control number found in your proxy.
If you have not received your 15-digit control number, please contact 1-800-564-6253 (toll-free in North America) or +1-514-982-7555 (outside North America). | Call the toll-free number on your voting instruction form (VIF) and vote using the 16-digit control number provided therein |
Online | www.investorvote.com (requires your 15-digit control number from your broker) | www.proxyvote.com (requires your 16-digit control number from your broker) |
If you are a beneficial MEG Shareholder and have not yet received your voting materials, please contact your broker or investment advisor to obtain your 16-digit control number and vote immediately at www.proxyvote.com. Your 16-digit control number will not change with the Improved Cenovus Transaction. Alternatively, contact Sodali & Co. at 1-888-999-2785 or [email protected] for help casting your vote.
MEG also reminds MEG Shareholders to submit their elections in respect of the consideration to be received pursuant to the Improved Cenovus Transaction. To be valid, MEG Shareholders must submit their elections to Computershare Investor Services Inc. (the “Depositary”), who is acting as depositary in connection with the Improved Cenovus Transaction, by the revised election deadline of Wednesday, October 29, 2025 at 4:30 p.m. (Calgary Time) (the “Revised Election Deadline”).
The Improved Cenovus Transaction provides MEG Shareholders with a choice to elect their preferred form of consideration and each MEG Shareholder will be entitled to elect to receive the Cash Consideration, the Share Consideration, or a combination thereof, in all cases, subject to rounding and proration as described above.
MEG Shareholders who do not submit their election ahead of the Revised Election Deadline will be deemed to have elected to receive Cash Consideration with respect to 50% of their MEG Shares and Share Consideration with respect to 50% of their MEG Shares.
Notwithstanding the election or deemed election of a MEG Shareholder for Cash Consideration or Share Consideration, such MEG Shareholder may receive a combination of Cash Consideration and Share Consideration (or a different combination than what was elected by such MEG Shareholder), depending on the elections (including deemed elections) made by all other MEG Shareholders.
A MEG Shareholder will not actually receive any consideration until the Improved Cenovus Transaction is completed and all required documents are submitted to the Depositary, including a Letter of Transmittal and Election Form and any certificate(s) or DRS Advice(s) representing their MEG Shares.
Due to the time sensitivity and the Canada Post strike, MEG recommends that all MEG Shareholders make their elections and courier or hand deliver the required documentation as soon as possible and in advance of the Revised Election Deadline to permit delivery to the Depositary at or prior to the Revised Election Deadline in accordance with the below instructions.
Please courier or hand deliver the required documentation to Computershare Investor Services Inc. at any of the following addresses:
Toronto: 320 Bay Street, 14th Floor, Toronto, ON, M5H 4A6, Canada, 1.416.263.2900
Montreal: 650 de Maisonneuve Blvd. West, 7th floor, Montreal, QC, H3A 3T2, Canada, 1.514.982.7888
Vancouver: 510 Burrard St, 3rd Floor, Vancouver, BC, V6C 3B9, Canada, 1.604.661.9400
Calgary: 800 – 324 8 Avenue SW Calgary, AB, T2P 2Z2, Canada, 1.403.267.6800
Registered MEG Shareholders: No further action is required of registered MEG Shareholders who have already submitted an election and who do not wish to change such election, including the mix of Cash Consideration and Share Consideration elected. In connection with the First Amending Agreement, MEG made available a Letter of Transmittal and Election Form to each registered MEG Shareholder which outlined the necessary documentation and information required to make an election with respect to the transaction consideration. Registered MEG Shareholders who have not yet made an election in respect of the consideration they wish to receive under the Cenovus transaction, or who wish to change their election, should use this Letter of Transmittal and Election Form to make their election in respect of the Improved Cenovus Transaction. The Letter of Transmittal and Election Form is for use by registered MEG Shareholders only and can be found at: https://www.megenergy.com/investors/shareholder-information/special-meeting-of-meg-shareholders/ and on MEG’s SEDAR+ issuer profile at www.sedarplus.ca. Registered MEG Shareholders can refer to the instructions contained in the Letter of Transmittal and Election Form and should ensure they provide the required documentation and information to the Depositary ahead of the Revised Election Deadline.
Beneficial MEG Shareholders: No further action is required of beneficial MEG Shareholders who have already submitted an election and who do not wish to change such election, including the mix of Cash Consideration and Share Consideration elected. Beneficial MEG Shareholders (MEG Shareholders whose MEG Shares are not registered in their name but are held by an intermediary or broker) who have not yet made an election or who wish to change their election may provide instructions to their broker or other nominee to make or change the election on such beneficial MEG Shareholder’s behalf. Intermediaries and brokers may establish earlier deadlines to make an election, and MEG urges such beneficial MEG Shareholders to contact their intermediary or broker for specific instructions.
Registered MEG Shareholders have the right to dissent with respect to the Improved Cenovus Transaction and to be paid by MEG the fair value of their MEG Shares in accordance with the provisions of Section 191 of the Business Corporations Act (Alberta), as modified by the interim order of the Court granted September 9, 2025 (the “Interim Order”) and the plan of arrangement, as appended to the Second Amending Agreement. Any dissent notices must be received by MEG, c/o Burnet, Duckworth & Palmer LLP, attention: Paul Chiswell, email: [email protected] by 5:00 p.m. (Calgary Time) on Wednesday, October 29, 2025. MEG Shareholders should review the Circular (as defined herein) for additional information with respect to their rights of dissent and how to exercise such dissent rights.
As a result of the First Amending Agreement and the Second Amending Agreement, MEG’s application (the “Final Order Application”) to the Court of King’s Bench of Alberta (the “Court”) for a final order in respect of the Improved Cenovus Transaction will be rescheduled to a later date. MEG Shareholders and any other interested parties that wish to attend the Final Order Application must file with the Court and serve upon MEG, c/o Burnet, Duckworth & Palmer LLP, attention: Paul Chiswell, email: [email protected], a notice of intention to appear on or before 5:00 p.m. (Calgary Time) on Wednesday October 29, 2025, which notice must comply with the instructions set out in the Circular.
MEG filed an information circular (“Circular”) on September 12, 2025, providing further details on the previously announced Cenovus transaction, election process and the upcoming Meeting. MEG Shareholders are encouraged to review the Circular. In accordance with the Interim Order, certain information provided in the Circular was revised in MEG’s press release dated October 10, 2025 to reflect recent updates, and has now been further revised in this press release, to reflect additional updates. Copies of the Circular, the Letter of Transmittal and Election Form, the First Amending Agreement, the Second Amending Agreement and additional information on the Meeting can be found at: https://www.megenergy.com/investors/shareholder-information/special-meeting-of-meg-shareholders/.
BMO Capital Markets and Burnet, Duckworth & Palmer LLP are acting as financial advisor and legal counsel, respectively, to the Company. RBC Capital Markets and Norton Rose Fulbright Canada LLP are acting as financial advisor and legal counsel, respectively, to the Special Committee.
Certain statements contained in this news release may contain forward-looking statements and forward-looking information (collectively, “forward-looking information”) within the meaning of applicable Canadian securities laws. All statements other than statements of historical fact may be forward-looking statements. Forward-looking information is frequently characterized by words such as “estimate”, “will”, “would”, “believe”, “plan”, “expected”, “potential”, and other similar words or statements that certain events or conditions “likely”, “may”, “should”, “would”, “might” or “could” occur. Forward-looking information is often, but not always, identified by such words. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, many of which are beyond MEG’s control. MEG believes the expectations reflected in the forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information included in this news release should not be unduly relied upon.
Specific forward-looking information contained in this news release includes, among others, statements pertaining to the following: that the Cenovus Shares will be highly liquid; the timing and location of the Meeting; expectations regarding the percentage of the MEG Shares expected to be voted in favour of the Improved Cenovus Transaction for both the 66 2/3% and Minority Approval Vote; the timing of the Proxy Deadline and of the Revised Election Deadline and the impact of failing to meet such deadlines; the completion of the Improved Cenovus Transaction, including the satisfaction of the closing conditions under the Arrangement Agreement, as amended by the First Amending Agreement and the Second Amending Agreement; that previously submitted proxies will be voted at the Meeting unless properly revoked; the form of consideration that MEG Shareholders will receive under the Improved Cenovus Transaction, including as a result of proration based on elections (including deemed elections) made by other MEG Shareholders; the timing of receipt of consideration under the Improved Cenovus Transaction; the impact of any Canada Post strike on the ability of MEG Shareholders to submit their proxies or Letters of Transmittal and Election Forms in respect of the Improved Cenovus Transaction; the expectation that the Final Order Application will be rescheduled to a later date; the exclusion of the MEG Shares held, directly or indirectly, by Strathcona and its respective related parties or joint actors, for the purpose of tabulating the Minority Approval Vote; and other similar statements.
Forward-looking information is based on, among other things, MEG’s expectations regarding its future, growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, plans for and results of drilling activity, environmental matters, business prospects and opportunities. Such forward-looking information reflects MEG’s current beliefs and assumptions and is based on information currently available to it.
With respect to forward-looking information contained in this news release, assumptions have been made regarding, among other things: the satisfaction of the conditions the Improved Cenovus Transaction is subject to; the approval of the Improved Cenovus Transaction at the Meeting (including the Minority Approval Vote) and the completion of the Improved Cenovus Transaction on anticipated terms and timing, or at all; the terms and conditions of the SCR Support Agreement; MEG’s standalone business plan; the future Cenovus Share price and the liquidity of the Cenovus Shares; future crude oil, bitumen blend, natural gas, electricity, condensate and other diluent prices; that tariffs currently in effect will remain the same; the combined company’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; foreign exchange rates and interest rates; the applicability of technologies for the recovery and production of reserves and contingent resources; the recoverability of reserves and contingent resources; the ability to produce and market production of bitumen blend successfully to customers; MEG’s ability to maintain its dividend and capital programs; future production levels and SOR; future capital and other expenditures; operating costs; anticipated sources of funding for operations and capital investments; the regulatory framework governing royalties, land use, taxes and environmental matters, including federal and provincial climate change policies, in the jurisdictions in which MEG and Cenovus conduct and will conduct their business; future debt levels; geological and engineering estimates in respect of reserves and contingent resources; the geography of the areas in which MEG is conducting exploration and development activities; the impact of increasing competition; the ability to obtain financing on acceptable terms; and business prospects and opportunities. Many of the foregoing assumptions are subject to change and are beyond MEG’s control.
Some of the risks that could affect MEG’s future results and could cause actual results to differ materially from those expressed in the forward-looking information include: the risk that the Improved Cenovus Transaction may be varied, accelerated or terminated in certain circumstances; risks relating to the outcome of the Improved Cenovus Transaction, including the risks associated with approval at the Meeting (including the Minority Approval Vote); the risk that the conditions to the Improved Cenovus Transaction may not be satisfied, or to the extent permitted, waived; the risk that the Arrangement Agreement or the SCR Support Agreement may be terminated prior to the completion of the Arrangement or the Meeting in accordance with the terms thereof; the risk that operating results will differ from what is currently anticipated; MEG’s status and stage of development; the concentration of MEG’s production in a single project; the majority of MEG’s total reserves and contingent resources are non-producing and/or undeveloped; the uncertainty of reserve and resource estimates; long-term reliance on third parties; the effect or outcome of litigation and/or regulatory challenges that may arise in relation to the Arrangement or otherwise; the effect of any diluent supply constraints and increases in the cost thereof; the potential delays of and costs of overruns on projects and future expansions of MEG’s assets; operational hazards; competition for, among other things, capital, the acquisition of reserves and resources, pipeline capacity and skilled personnel; risks inherent in the bitumen recovery process; changes to royalty regimes; the failure of MEG to meet specific requirements in respect of its oil sands leases; claims made by Indigenous peoples; unforeseen title defects and changes to the mineral tenure framework; risks arising from future acquisition activities; sufficiency of funds; fluctuations in market prices for crude oil, natural gas, electricity and bitumen blend; future sources of insurance for MEG’s property and operations; public health crises, similar to the COVID-19 pandemic, including weakness and volatility of crude oil and other petroleum products prices from decreased global demand resulting from public health crises; risk of war (including the conflicts between Russia and Ukraine and Israel, Hamas and Iran); general economic, market and business conditions; volatility of commodity inputs; variations in foreign exchange rates and interest rates; hedging strategies; national or global financial crisis; environmental risks and hazards, including natural hazards such as regional wildfires, and the cost of compliance with environmental legislation and regulations, including greenhouse gas regulations, potential climate change legislation and potential land use regulations; enacted and proposed export and import restrictions, including but not limited to tariffs, export taxes or curtailment on exports; failure to accurately estimate abandonment and reclamation costs; the need to obtain regulatory approvals and maintain compliance with regulatory requirements; the extent of, and cost of compliance with, laws and regulations and the effect of changes in such laws and regulations from time to time including changes which could restrict MEG’s ability to access foreign capital; failure to obtain or retain key personnel; potential conflicts of interest; changes to tax laws (including without limitation, a potential United States border adjustment tax) and government incentive programs; the potential for management estimates and assumptions to be inaccurate; risks associated with establishing and maintaining systems of internal controls; risks associated with the tariffs imposed on the import and export of commodities and the possibility that such tariffs may change; political risks and terrorist attacks; risks associated with downgrades in the credit ratings for MEG’s securities; cybersecurity errors, omissions or failures; restrictions contained in MEG’s credit facilities, other agreements relating to indebtedness and any future indebtedness; any requirement to incur additional indebtedness; MEG defaulting on its obligations under its indebtedness; and the inability of MEG to generate cash to service its indebtedness.
The foregoing list of risks, uncertainties and factors is not exhaustive. The effect of any one risk, uncertainty or factor on particular forward-looking information is not determinable with certainty as these factors are independent, and management’s future course of action would depend on an assessment of all available information at that time. Although, based on information available to MEG on the date of this news release, MEG believes that the expectations in and assumptions used in such forward-looking information are reasonable, MEG gives no assurances as to future results, levels of activity or achievements and cannot make assurances that actual results will be consistent with such forward-looking information. Accordingly, readers are cautioned that the actual results achieved may vary from the forward-looking information provided herein and that the variations may be material. Readers are also cautioned that the foregoing list of assumptions, risks and factors is not exhaustive.
Further information regarding the assumptions and risks inherent in the making of forward-looking statements and in respect of the Improved Cenovus Transaction can be found under the heading “Risk Factors” in MEG’s annual information form dated February 27, 2025 for the year ended December 31, 2024 and under the heading “Forward-Looking Statements” in the Circular, along with MEG’s other public disclosure documents which are available through the Company’s website at http://www.megenergy.com/investors and through the SEDAR+ website at www.sedarplus.ca.
The forward-looking information included in this news release is expressly qualified in its entirety by the foregoing cautionary statements. Unless otherwise stated, the forward-looking information included in this news release is made as of the date of this news release and MEG assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by applicable Canadian securities laws. Due to the risks, uncertainties and assumptions inherent in forward-looking information, readers should not place undue reliance on this forward-looking information.
Shareholder Questions:
MEG Investor Relations, 403.767.0515, [email protected]
Sodali & Co., 1.888.999.2785 or 1.289.695.3075 for banks, brokers, and callers outside North America, [email protected]
Media Questions:
MEG Media Relations, 403.775.1131, [email protected]
SOURCE MEG Energy Corp.
INVESTORS
Sodali & Co
Toll free in North America at 1-888-999-2785, or at 1-289-695-3075 for banks, brokers, and callers outside North America or by email at [email protected].
MEDIA
Jim Campbell
Vice President, Communications and External Relations
T 403.775.1117
E [email protected]
All amounts in Canadian dollars unless specified.
CALGARY, AB, Oct. 8, 2025 /CNW/ – MEG Energy Corp. (TSX: MEG) (“MEG”, or the “Company”) today announced that it has entered into an amending agreement (the “Amending Agreement”) with Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) (“Cenovus”) to amend the arrangement agreement between MEG and Cenovus dated August 21, 2025. The Amending Agreement increases the consideration payable to holders (“MEG Shareholders”) of common shares of MEG (“MEG Shares”) to $29.80 per MEG Share (the “Improved Transaction Consideration”) based on Cenovus’s closing share price on October 7, 2025, representing a 46% premium to MEG’s unaffected 20-day volume-weighted share price as of May 15, 2025, the last trading day preceding the first public announcement by Strathcona Resources Ltd. (“Strathcona”) that it intended to acquire MEG.
The Improved Transaction Consideration represents an increase of $2.35 per MEG Share from the market value of the consideration (the “Initial Transaction Consideration”) offered under the initial transaction with Cenovus, as announced on August 22, 2025 (the “Initial Cenovus Transaction”), and an increase of $1.32 per MEG Share from the market value of the Initial Transaction Consideration as of October 7, 2025.
Under the revised transaction with Cenovus, as amended by the terms of the Amending Agreement (the “Improved Cenovus Transaction”), each MEG Shareholder will have the option to elect to receive:
in all cases, subject to rounding and proration based on maximum aggregate Cash Consideration of approximately $3.8 billion and maximum aggregate Share Consideration of approximately 157.7 million Cenovus Shares, as set out in the Amending Agreement.
The value of the Improved Transaction Consideration represents a mix of 50% cash and 50% Cenovus Shares. On a fully prorated basis, consideration per MEG Share represents approximately $14.75 in cash and 0.620 of a Cenovus Share. The consideration to be received by MEG Shareholders values MEG at $29.80 per MEG Share on a fully prorated basis at Cenovus’s closing share price on October 7, 2025, representing an enterprise value of approximately $8.6 billion, including assumed debt.
In consideration of Cenovus amending and increasing the consideration for MEG, MEG and Cenovus have also amended the terms of the existing standstill agreement between the parties to allow Cenovus to complete purchases of up to 9.9% of the MEG Shares.
The Amending Agreement will be filed on MEG’s SEDAR+ profile at www.sedarplus.ca.
“We are pleased to announce the Amending Agreement with Cenovus, which provides improved transaction economics and greater opportunity for MEG Shareholders to participate in substantial synergies through a higher equity component,” said James McFarland, Chairman of MEG’s board of directors (the “MEG Board”). “This marks the third enhancement to the terms originally put forward by Cenovus, delivering a significant increase to an already attractive transaction. The Improved Cenovus Transaction is the value maximizing strategic alternative for MEG Shareholders.”
“Since the Initial Cenovus Transaction was announced, there has been strong recognition of the industrial logic and the synergy potential between MEG and Cenovus,” said Darlene Gates, President and CEO of MEG. “The Amending Agreement enables MEG Shareholders to benefit from greater upside through a significant increase to the proportion of share consideration, while also raising the Initial Transaction Consideration. The Improved Transaction Consideration implies a flowing-barrel metric of $79,500 per bpd, the highest value ever paid for a pure-play oil sands asset.”
The special meeting of MEG Shareholders (the “Meeting”), previously scheduled for Thursday, October 9, 2025 at 9:00 a.m. (Calgary Time), has been postponed to Wednesday, October 22, 2025 at 9:00 a.m. (Calgary Time), to allow MEG Shareholders additional time to deposit proxies and vote FOR the Improved Cenovus Transaction.
The Meeting will take place at Brookfield Place, 225 – 6th Avenue S.W., Suite 1400, Calgary, Alberta or through a live audio webcast accessible at https://meetings.lumiconnect.com/400-560-917-636. The password for the live audio webcast of the Meeting is “meg2025”, case-sensitive.
The MEG Board urges you to deposit your proxy form or voting instruction form and vote FOR the Improved Cenovus Transaction ahead of the revised proxy deadline of Monday October 20, 2025 at 9:00 a.m. (Calgary Time) (the “Revised Proxy Deadline”).
Due to the time sensitivity and the Canada Post strike, MEG Shareholders are strongly encouraged to only vote online or by telephone prior to the Revised Proxy Deadline using the instructions below:
Registered MEG Shareholders | Beneficial MEG Shareholders | |
|---|---|---|
Who? | If your MEG Shares are held in your name and represented by a physical certificate or direct registration system advice (“DRS Advice”) | If your MEG Shares are held with a broker, bank or other intermediary |
Telephone | Call 1.866.732.VOTE (8683) (toll-free in North America) or 1.312.588.4290 (outside North America) using the 15-digit control number found in your proxy.
If you have not received your 15-digit control number, please contact 1-800-564-6253 (toll-free in North America) or +1-514-982-7555 (outside North America). | Call the toll-free number on your voting instruction form (VIF) and vote using the 16-digit control number provided therein |
Online | www.investorvote.com (requires your 15-digit control number from your broker) | www.proxyvote.com (requires your 16-digit control number from your broker) |
If you are a beneficial MEG Shareholder and have not yet received your voting materials, please contact your broker or investment advisor to obtain your 16-digit control number and vote immediately at www.proxyvote.com. Alternatively, contact Sodali & Co. at 1-888-999-2785 or [email protected] for help casting your vote.
Deadline to Submit Consideration Election Revised to Monday, October 20, 2025
MEG Shareholders are entitled to submit their elections in respect of the consideration to be received pursuant to the Improved Cenovus Transaction. To be valid, MEG Shareholders must submit their elections to Computershare Investor Services Inc. (the “Depositary”), who is acting as depositary in connection with the Improved Cenovus Transaction, by Monday, October 20, 2025 at 4:30 p.m. (Calgary Time) (the “Revised Election Deadline”).
Under the terms of the Amending Agreement, MEG Shareholders who do not submit their election ahead of the Revised Election Deadline will be deemed to have elected to receive Cash Consideration with respect to 50% of their MEG Shares and Share Consideration with respect to 50% of their MEG Shares.
MEG Shareholders who have already made an election, whether for all Cash Consideration, Share Consideration, or a combination thereof, are encouraged to consider their election in light of the Improved Cenovus Transaction. If a MEG Shareholder desires to change a prior election, such MEG Shareholder should re-submit their election using the instructions below prior to the Revised Election Deadline.
Notwithstanding the election or deemed election of a MEG Shareholder for Cash Consideration or Share Consideration, such MEG Shareholder may receive a combination of Cash Consideration and Share Consideration (or a different combination than what was elected by such MEG Shareholder), depending on the elections (including deemed elections) made by all other MEG Shareholders.
A MEG Shareholder will not actually receive any consideration until the Improved Cenovus Transaction is completed and all required documents are submitted to the Depositary, including the Letter of Transmittal and Election Form and any certificate(s) or DRS Advice(s) representing their MEG Shares.
Due to the time sensitivity and the Canada Post strike, MEG recommends that all MEG Shareholders make their elections and courier or hand deliver required documentation as soon as possible and in advance of the Revised Election Deadline to permit delivery to the Depositary at or prior to the Revised Election Deadline in accordance with the below instructions.
Please courier or hand deliver to Computershare Investor Services Inc. at any of the following addresses:
Toronto: 320 Bay Street, 14th Floor, Toronto, ON, M5H 4A6, Canada, 1.416.263.2900
Montreal: 650 de Maisonneuve Blvd. West, 7th floor, Montreal, QC, H3A 3T2, Canada, 1.514.982.7888
Vancouver: 510 Burrard St, 3rd Floor, Vancouver, BC, V6C 3B9, Canada, 1.604.661.9400
Calgary: 800 – 324 8 Avenue SW Calgary, AB, T2P 2Z2, Canada, 1.403.267.6800
Registered MEG Shareholders: No further action is required of MEG Shareholders who have already submitted an election under the Initial Cenovus Transaction and who do not wish to change such election. For the benefit of those who have not yet made an election or who wish to change their election, MEG shall deliver a Letter of Transmittal and Election Form to each registered MEG Shareholder which will outline the necessary documentation and information required to make an election in respect of the consideration such MEG Shareholder wishes to receive under the Improved Cenovus Transaction. Registered MEG Shareholders can refer to the instructions contained in the Letter of Transmittal and Election Form and ensure they provide the required documentation and information to the Depositary ahead of the Revised Election Deadline.
Beneficial MEG Shareholders: No further action is required of MEG Shareholders who have already submitted an election under the Initial Cenovus Transaction and who do not wish to change such election. MEG Shareholders who have not yet made an election or who wish to change their election, and whose MEG Shares are not registered in their name but are held by an intermediary or broker may provide instructions to their broker or other nominee to make or change the election on such MEG Shareholder’s behalf. Intermediaries and brokers may establish earlier deadlines to make an election, and the MEG Board urges such beneficial MEG Shareholders to contact their intermediary or broker for specific instructions.
The MEG Board, informed in part by the recommendation of a special committee of independent directors (the “Special Committee”) and after considering advice from its external financial and legal advisors, unanimously determined that the Improved Cenovus Transaction is in the best interests of MEG, and approved the Amending Agreement and the transactions contemplated thereby. The MEG Board recommends MEG Shareholders vote FOR the Improved Cenovus Transaction at the Meeting.
The Improved Cenovus Transaction is subject to a number of conditions, including: (i) approval by at least 66⅔% of the MEG Shareholders represented in person or by proxy at the Meeting; (ii) approval of the Court of King’s Bench of Alberta; and (iii) other customary closing conditions. The Competition Act Approval and the HSR Approval (each as defined in Amending Agreement), were obtained on September 25, 2025 and September 16, 2025, respectively, and remain in effect for the Improved Cenovus Transaction.
The MEG Board recommends that MEG Shareholders vote FOR the Improved Cenovus Transaction for the following reasons:
For additional detail, please refer to MEG’s investor presentation dated October 8, 2025, which is available at www.megenergy.com/offer-update
MEG’s management information circular in respect of the Initial Cenovus Transaction dated September 9, 2025 (the “Circular”) is available at www.megenergy.com/offer-update and on SEDAR+ at www.sedarplus.ca. MEG does not intend to prepare or deliver a revised management information circular in respect of the Improved Cenovus Transaction.
BMO Capital Markets and Burnet, Duckworth & Palmer LLP are acting as financial advisor and legal counsel, respectively, to the Company. RBC Capital Markets and Norton Rose Fulbright Canada LLP are acting as financial advisor and legal counsel, respectively, to the Special Committee.
Certain statements contained in this news release may contain forward-looking statements and forward-looking information (collectively, “forward-looking information”) within the meaning of applicable Canadian securities laws. All statements other than statements of historical fact may be forward-looking statements. Forward-looking information is frequently characterized by words such as “will”, “expect”, “intend”, “plan”, “potential”, “growth”, “opportunity”, “future” and other similar words or statements that certain events or conditions “likely”, “may”, “should”, “would”, “might” or “could” occur. Forward-looking information is often, but not always, identified by such words. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, many of which are beyond MEG’s control. MEG believes the expectations reflected in the forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information included in this news release should not be unduly relied upon.
Specific forward-looking information contained in this news release includes, among others, statements pertaining to the following: that the Improved Cenovus Transaction offers improved transaction economics; the timing and location of the Meeting; the timing of the Revised Proxy Deadline and of the Revised Election Deadline and the impact of failing to meet such deadlines; the treatment of previously submitted proxies; the form of consideration that MEG Shareholders will receive under the Improved Cenovus Transaction, including as a result of deemed elections and pro-ration based on elections made by other MEG Shareholders; the completion of the Improved Cenovus Transaction, including the anticipated timing thereof and the satisfaction of the closing conditions under the Amending Agreement; the timing for receipt of consideration by MEG Shareholders under the Improved Cenovus Transaction; anticipated benefits of the Improved Cenovus Transaction, including participation in future upside of Cenovus; that the combined company will benefit from greater efficiencies and significant synergies, including Cenovus’s expectations to realize $150 million in near-term annual synergies, increasing to $400 million per year in 2028 and beyond; the scale and growth potential of Cenovus; Cenovus’s plans to spend incremental capital of approximately $400 million between 2026-2028 and the anticipated impact thereof, including delivering production capacity of 150,000 bpd at Christina Lake; that the Improved Cenovus Transaction offers a high degree of value certainty; that the Cenovus Shares will be freely tradeable upon closing and that such Cenovus Shares will be highly liquid; the timing of filing of the Amending Agreement on MEG’s SEDAR+ profile; the impact of any Canada Post strike on the ability of MEG Shareholders to submit their proxies or Letters of Transmittal and Election Forms in respect of the Improved Cenovus Transaction; that MEG does not intend to file or deliver a revised circular in respect of the Improved Cenovus Transaction; and other similar statements.
Forward-looking information is based on, among other things, MEG’s expectations regarding its future, growth, results of operations, production, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, plans for and results of drilling activity, environmental matters, business prospects and opportunities. Such forward-looking information reflects MEG’s current beliefs and assumptions and is based on information currently available to it.
With respect to forward-looking information contained in this news release, assumptions have been made regarding, among other things: the satisfaction of the closing conditions in respect of the Improved Cenovus Transaction; the approval of the Improved Cenovus Transaction at the Meeting and the completion of the Improved Cenovus Transaction on anticipated terms and timing, or at all; MEG’s standalone business plan; the future Cenovus Share price and the liquidity of the Cenovus Shares; the price of common shares of Strathcona and the future trading liquidity of such Strathcona common shares; future crude oil, bitumen blend, natural gas, electricity, condensate and other diluent prices; that tariffs currently in effect will remain the same; the combined company’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; foreign exchange rates and interest rates; the applicability of technologies for the recovery and production of reserves and contingent resources; the recoverability of reserves and contingent resources; the ability to produce and market production of bitumen blend successfully to customers; MEG’s ability to maintain its dividend and capital programs; future production levels and SOR; future capital and other expenditures; operating costs; anticipated sources of funding for operations and capital investments; the regulatory framework governing royalties, land use, taxes and environmental matters, including federal and provincial climate change policies, in the jurisdictions in which MEG and Cenovus conduct and will conduct their business; future debt levels; geological and engineering estimates in respect of reserves and contingent resources; the geography of the areas in which MEG is conducting exploration and development activities; the impact of increasing competition; the ability to obtain financing on acceptable terms; and business prospects and opportunities. Many of the foregoing assumptions are subject to change and are beyond MEG’s control.
Some of the risks that could affect MEG’s future results and could cause actual results to differ materially from those expressed in the forward-looking information include: the risk that the Improved Cenovus Transaction may be varied, accelerated or terminated in certain circumstances; risks relating to the outcome of the Improved Cenovus Transaction, including the risks associated with approval at the Meeting; the risk that the closing conditions under the Improved Cenovus Transaction may not be satisfied, or to the extent permitted, waived; the risk that operating results will differ from what is currently anticipated; MEG’s status and stage of development; the concentration of MEG’s production in a single project; the majority of MEG’s total reserves and contingent resources are non-producing and/or undeveloped; the uncertainty of reserve and resource estimates; long-term reliance on third parties; the effect or outcome of litigation; the effect of any diluent supply constraints and increases in the cost thereof; the potential delays of and costs of overruns on projects and future expansions of MEG’s assets; operational hazards; competition for, among other things, capital, the acquisition of reserves and resources, pipeline capacity and skilled personnel; risks inherent in the bitumen recovery process; changes to royalty regimes; the failure of MEG to meet specific requirements in respect of its oil sands leases; claims made by Indigenous peoples; unforeseen title defects and changes to the mineral tenure framework; risks arising from future acquisition activities; sufficiency of funds; fluctuations in market prices for crude oil, natural gas, electricity and bitumen blend; future sources of insurance for MEG’s property and operations; public health crises, similar to the COVID-19 pandemic, including weakness and volatility of crude oil and other petroleum products prices from decreased global demand resulting from public health crises; risk of war (including the conflicts between Russia and Ukraine and Israel, Hamas and Iran); general economic, market and business conditions; volatility of commodity inputs; variations in foreign exchange rates and interest rates; hedging strategies; national or global financial crisis; environmental risks and hazards, including natural hazards such as regional wildfires, and the cost of compliance with environmental legislation and regulations, including greenhouse gas regulations, potential climate change legislation and potential land use regulations; enacted and proposed export and import restrictions, including but not limited to tariffs, export taxes or curtailment on exports; failure to accurately estimate abandonment and reclamation costs; the need to obtain regulatory approvals and maintain compliance with regulatory requirements; the extent of, and cost of compliance with, laws and regulations and the effect of changes in such laws and regulations from time to time including changes which could restrict MEG’s ability to access foreign capital; failure to obtain or retain key personnel; potential conflicts of interest; changes to tax laws (including without limitation, a potential United States border adjustment tax) and government incentive programs; the potential for management estimates and assumptions to be inaccurate; risks associated with establishing and maintaining systems of internal controls; risks associated with the tariffs imposed on the import and export of commodities and the possibility that such tariffs may change; political risks and terrorist attacks; risks associated with downgrades in the credit ratings for MEG’s securities; cybersecurity errors, omissions or failures; restrictions contained in MEG’s credit facilities, other agreements relating to indebtedness and any future indebtedness; any requirement to incur additional indebtedness; MEG defaulting on its obligations under its indebtedness; and the inability of MEG to generate cash to service its indebtedness.
The foregoing list of risks, uncertainties and factors is not exhaustive. The effect of any one risk, uncertainty or factor on particular forward-looking information is not determinable with certainty as these factors are independent, and management’s future course of action would depend on an assessment of all available information at that time. Although, based on information available to MEG on the date of this news release, MEG believes that the expectations in and assumptions used in such forward-looking information are reasonable, MEG gives no assurances as to future results, levels of activity or achievements and cannot make assurances that actual results will be consistent with such forward-looking information. Accordingly, readers are cautioned that the actual results achieved may vary from the forward-looking information provided herein and that the variations may be material. Readers are also cautioned that the foregoing list of assumptions, risks and factors is not exhaustive.
Further information regarding the assumptions and risks inherent in the making of forward-looking statements and in respect of the Improved Cenovus Transaction can be found under the heading “Risk Factors” in MEG’s annual information form dated February 27, 2025 for the year ended December 31, 2024 and under the heading “Forward-Looking Statements” in the Circular, along with MEG’s other public disclosure documents which are available through the Company’s website at http://www.megenergy.com/investors and through the SEDAR+ website at www.sedarplus.ca.
The forward-looking information included in this news release is expressly qualified in its entirety by the foregoing cautionary statements. Unless otherwise stated, the forward-looking information included in this news release is made as of the date of this news release and MEG assumes no obligation to update or revise any forward-looking information to reflect new events or circumstances, except as required by applicable Canadian securities laws. Due to the risks, uncertainties and assumptions inherent in forward-looking information, readers should not place undue reliance on this forward-looking information.
Shareholder Questions:
MEG Investor Relations, 403.767.0515, [email protected]
Sodali & Co., 1.888.999.2785 or 1.289.695.3075 for banks, brokers, and callers outside North America, [email protected]
Media Questions:
MEG Media Relations, 403.775.1131, [email protected]
MEG Energy Corp. (TSX: MEG) ( “MEG”, or the “Company”) today announced that it has entered into an arrangement agreement (the “Arrangement Agreement”) with Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) (“Cenovus”) under which Cenovus will acquire all issued and outstanding common shares of MEG (“MEG Shares”) in a transaction that values MEG at $27.25 per MEG Share, (the “Purchase Price”).
The proposed transaction (the “Transaction”) to be completed by way of a plan of arrangement under the Business Corporations Act (Alberta) represents a MEG enterprise value of $7.9 billion, inclusive of assumption of MEG’s debt, and is expected to close early in the fourth quarter of 2025, subject to customary approvals.
Under the terms of the Transaction, each holder of MEG Shares (a “MEG Shareholder”) will have the option to elect to receive for each MEG Share:
On a fully pro-rated basis, consideration per MEG Share represents approximately $20.44 in cash and 0.33125 of a Cenovus common share. The value of consideration payable under the Arrangement Agreement represents a mix of 75% cash and 25% Cenovus Shares. The Transaction is fully financed by Cenovus and is not subject to any financing conditions.
On June 16, 2025, MEG initiated a strategic review of alternatives (the “Process”) which sought to surface an offer superior to the Company’s compelling standalone plan. The Process was approved by the MEG Board which authorized a special committee comprised of independent members of the MEG Board (the “Special Committee”) to oversee the Process.
After evaluating several alternatives, including continuing with MEG’s previously announced standalone development plan, a comprehensive review of the unsolicited offer (“Unsolicited Strathcona Offer”) from Strathcona Resources Ltd. (“Strathcona”), and proposals received in the Process, the MEG Board has determined that the Transaction is in the best interests of MEG and its stakeholders.
The MEG Board, informed in part by the recommendation of the Special Committee, and after considering advice from its external financial and legal advisors, has unanimously:
All directors and executive officers of MEG have entered into voting support agreements pursuant to which they have agreed, among other things, to vote their MEG Shares in favour of and otherwise support the Transaction, subject to the provisions of such agreements.
MEG shareholders will vote on the Transaction at a special meeting (the “Meeting”) expected to be held in early October 2025. The Transaction requires approval by at least 662/3% of the votes cast at the Meeting by MEG Shareholders represented in person or by proxy. Details of the Transaction and the required shareholder vote will be included in an information circular (“Circular”) that MEG expects to mail to the MEG Shareholders and file on SEDAR+ (www.sedarplus.com) in mid-September 2025. All MEG Shareholders are urged to read the Circular once available as it will contain additional important information concerning the Transaction including the deadline for making elections to receive cash and/or Cenovus Shares.
The Transaction is subject to a number of other conditions including certain required regulatory and government approvals, as further detailed in the Arrangement Agreement, a copy of which will be filed on SEDAR+ (www.sedarplus.ca).
If you have already tendered your MEG Shares to the Unsolicited Strathcona Offer, you can withdraw your MEG Shares by contacting your broker or Sodali & Co., by toll free phone call in North America to 1-888-999-2785, or to 1-289-695-3075 for banks, brokers, and callers outside North America or by email at [email protected].
MEG Energy Urges Shareholders to Take NO ACTION
MEG Energy Corp. (TSX:MEG, “MEG”, or the “Company”) announced on June 16, 2025, that its Board of Directors (the “Board”) has determined that Strathcona Resources Ltd.’s (“Strathcona”) unsolicited bid to acquire all of the issued and outstanding MEG shares is inadequate, opportunistic, and NOT in the best interests of MEG or its shareholders.
On May 30, 2025, Strathcona made a formal offer to acquire all of the issued and outstanding MEG shares it does not already own for a combination of 0.62 of a Strathcona share and $4.10 in cash per MEG share (the “Offer”). The Offer remains open until September 15, 2025.
MEG’s Board formed a Special Committee to conduct a thorough evaluation of the Offer with the assistance of financial and legal advisors. Following this review and on the recommendation of the Special Committee, the Board has concluded that the consideration to be received by shareholders under the Offer is inadequate, from a financial point of view, to shareholders, is not in the best interests of the Company or its shareholders, and unanimously recommends that shareholders REJECT the Offer by taking no action and NOT TENDER their shares.
NO ACTION is required to reject the Offer.
If you have already tendered your shares to the Offer, you can withdraw your shares by contacting your broker or Sodali & Co, the information agent retained by MEG, by toll-free phone call in North America to 1-888-999-2785, or to 1-289-695-3075 for banks, brokers, and callers outside North America or by e-mail at [email protected].
The Board filed its Directors’ Circular on June 16, 2025, which provides information for shareholders about MEG’s prospects and the Board’s analysis, deliberations and recommendations. The Directors’ Circular is available below and on SEDAR+ at www.sedarplus.ca. Additional information can be found in the Investor Presentation, which is also available below.
In its Directors’ Circular, the Board details the reasons for its recommendations, including:
As noted in the Directors’ Circular, the Board also considered the following:
Incident notification – April 30, 2016 – Meg Energy announces that today, at approximately 08:15 hrs, during work carried out on a natural gas well near the village of Edmonton in Alberta.